## Credit Terminology: Understanding the language

Credit terminology. Capital Structure. How a business’ assets are financed determines its Capital Structure (also known as Financial Structure). There are generally two methods of financing available to a firm — equity, debt or a combination of both. The proportion of equity and debt, which

## Credit Analysis Mindset

Credit Analysis mindset As a credit analyst you are tasked with answering a few simple questions on every case that is assigned to you: Why does the client need the additional capacity provided by the credit line? How strong is this relationships and what signals

## Master Class: Ratio Analysis: Liquidity, Leverage, Profitability, Productivity: Course Guide

The Ratio Analysis course starts with the very basics of foundation and then quickly moves into the four key dimensions of ratio analysis: Liquidity, Leverage, Profitability, and Productivity The course uses two comprehensive walk through cases on Office Depot and Staples to illustrate applications using

## Master Case: ODP and Staples: Ratio Analysis

A Master Case is a comprehensive hands on a real world example that walks you through a given topic and its application using real world data. The ODP and Staples Master Case takes two vendors from the small business whole sale supplies sector and compares

## Master Credit Analysis: Course Guide

This is the first course on credit analysis that focuses on the impact of leverage on a business. We look at two different instances of leverage – one financial, one operational and use that to calculate degrees of operational leverage. Degrees of operational leverage is

## Ratio Analysis example. Office Depot: Financial Condition Review

Ratio Analysis Example & Case Study – Office Depot Office Depot. Financial Condition Review. (ODP), Office Depot’s Common Stock, is listed on the New York Stock Exchange. The firm is also included in the S&P 500 and the Fortune 500. Additional information about the company is

## Credit Analysis: Understanding Financial Leverage

Credit Analysis: Financial Leverage What impact do fixed financial charges (financial leverage) have on a firm’s financial position? Fixed operating costs make a firm’s Operating Income more sensitive to changes in Sales. The next step would be to see if the same relationship holds for fixed

## Credit Analysis: Fixed Costs and Operating leverage

Fixed Costs and Operating Leverage Are fixed costs evil? And if they are evil then why do businesses willingly take them on? Should management depend entirely on variable costs to run its business? Is there any way that we can answer these questions? There is no

## Credit Analysis: Breakeven and leverage

Credit Analysis.  Break even and Leverage Explains how businesses can adjust costs and levels of production to attain optimum results. Break even point (BEP) is the level of production at which a firm’s revenues just cover its costs. Beyond this level the firm earns profits; anything

## Credit Analysis. Leverage: Introductions

Credit Analysis and Leverage. Firms employ external funds to finance business operations. External funds differ by the required or expected return that investors need, when (or if) the funds need to be paid back and the order in which they are paid back. Leverage is

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